The Mets pay former All-Star a $1.19 million annuity until he is 72.
July 1st is a notable day on the calendar for quite a few Major League Baseball retired players. It's the day many deferred salary payments are due. Former All-Star Bobby Bonilla, who last played in 2001, has become the posterchild of these July 1st annuities.
As part of a deferred salary arrangement, the New York Mets have paid Bonilla an $1,193,248.20 annuity every July 1 since 2011. These annuities continue until 2035. Bonilla, who is now 58, will be 72 when the last annuity payment is made.
The Mets signed Bonilla to a five-year contract worth $29 million in 1991 that was the richest contract in team sports at the time. He spent the first three-and-a-half seasons of that contract with New York before being traded away. Bonilla won a World Series with the Marlins in 1997 and was later traded back to the Mets as part of Florida's post-championship fire sale.
Bonilla's deferred salary with the Mets is currently the largest July 1 annuity payment in baseball, but it is not the only July 1 annuity payment. In fact, Bonilla himself has a second deferred salary agreement with the Orioles. Baltimore owes him a $500,000 annuity payment from 2004 until 2028. Today is a good day in the Bonilla checkbook with two large annuities arriving.
Here are a few other notable deferred salary annuities:
- The Braves have paid Hall of Fame closer Bruce Sutter a $1.2 million annuity since 1991. This year is the final year of Sutter's annuity plan. The team also owes him a $9.1 million lump sum payment next year.
- The Reds have paid Ken Griffey Jr. a $3.6 million annuity since 2009 and his last annuity payment comes this year.
- The Red Sox have paid Manny Ramirez a $2 million annuity since 2011 and will continue these annuities until 2026.
- The White Sox have paid Paul Konerko a $1 million annuity since 2014 and his last annuity payment comes this year.
- The Mets have paid Bret Saberhagen a $250,000 annuity since 2004 and will continue to do so through 2028.
The Nationals have some of their largest contracts set up as annuities. For example, they're paying Rafael Soriano a $2 million annuity until 2024, Max Scherzer is owed a $15 million annuity from 2022 until 2028, and Stephen Strasburg has a $114 million in annuities due to him through 2029.
Annuities aren't bad. But they are better when someone else is paying for them.
What is an annuity? The latin root is annuitas, which means "annual payment" although the annuity payments can be monthly, quarterly, or semi-annual, too.
Americans may know annuities as "pensions." The most common annuity Americans receive is their Social Security benefits for retirement, which are paid monthly.
Most modern annuities owned by individuals are deferred annuities, which means the payments will start one or several years into the future. There are even deferred annuities that do not have maturity dates, so they can be deferred until the annuitant dies. An annuity can also start payments today, or in one or several months from now. We call those immediate annuities.
Annuities are only issued by Life Insurance companies, and they are the only retirement plan available that can guarantee an income for life, no matter how long one mayh live. No other investment scheme or product has that guarantee.
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